An 86-year-old man went to the Rhode Island Hospital emergency room after a fall caused blood to start pooling in his head. While the hospital was one of the best in the world, it also suffered severe internal divisions. The nurses went on strike to protest dangerous working conditions and abusive treatment from doctors. The nurses got used to making extra efforts to fix doctors’ errors and accommodate their rage. The hospital’s culture was the opposite of Alcoa’s: it was toxic and developed erratically, without any real planning.
Whereas Starbucks’s effective organizational habits contributed to its success, Rhode Island Hospital’s dysfunctional habits caused a series of catastrophic failures. Specifically, the hospital didn’t efficiently balance power and authority among its employees. This underlines Duhigg’s central point about habits: they can make or break the people and organizations that exercise them.
The Rhode Island Hospital’s culture caused serious problems. The 86-year-old fall victim’s paperwork didn’t say which side of his head needed the operation. When a nurse proposed pulling up the brain scans to check, the neurosurgeon surgeon yelled at her, modified the man’s medical consent forms, and then drilled into the wrong side of his head. The man died two weeks after the surgery, and the family successfully sued the hospital. The surgeon was fired. But the nurses knew that an error like this was inevitable because of the hospital’s culture. While thoughtless leaders often promote dysfunctional institutional habits, effective leaders can build better ones—even during a crisis.
The surgeon who botched the operation is clearly responsible for this man’s death, but Duhigg argues that the hospital’s overall culture is also responsible. This is because the hospital’s culture encouraged the surgeon’s misbehavior instead of stopping it. Again, this shows that dysfunctional habits have serious consequences. It also suggests that organizations have a moral responsibility to develop effective habits, even if doing so can be incredibly difficult and require major change.
In their influential 1982 book An Evolutionary Theory of Economic Change, Yale professors Richard Nelson and Sidney Winter argued that organizations’ behavior is really controlled by institutional routines, not rational choices. These routines help organizations perform consistently over time. They also enable rival factions to work together by building truces, even as they compete for power. For instance, executives can often get ahead by sabotaging their rivals, but most companies discourage this. So, rival executives make a truce to work together for the company’s benefit.
Nelson and Winter’s book essentially made the same argument as Duhigg—just on the scale of organizations, instead of individuals. Namely, habits determine most people and organizations’ decisions, which means that habits are the key to people and organizations’ success. Duhigg also points out that, unlike individuals, organizations often have to deal with competing interests and factions among their members. This means that one of organizational habits’ most important purposes is to determine the balance of power—which determines if and how organizations can make key decisions. This is why the Rhode Island Hospital’s habits were dysfunctional: the hospital gave doctors too much power and nurses too little.
Success at work usually depends on informal habits like who to trust, who has power, and how to get things done. For instance, highly creative fashion designers can’t succeed unless they develop the right logistical routines. To do this, they usually have to work at other fashion companies and build truces with others in the process. In contrast, the truce between doctors and nurses at Rhode Island Hospital didn’t hold together. The nurses bent over backwards to accommodate the doctors, who didn’t care about them—and often didn’t even learn their names. To fix this dynamic, the hospital’s leaders needed to build better organizational habits.
Successful fashion designers again illustrate the key benefit of good habits: they save time and energy by automating complex tasks. Thus, by automating logistics, fashion designers save their energy for their creative work. But this requires effective personal and organizational habits. In fact, Duhigg suggests that good organizational habits in the fashion industry depend directly on strong personal relationships. This isn’t the case at the Rhode Island Hospital, where doctors get away with abusive behavior because they are not personally accountable to the nurses.
In 1987, a London Underground worker learned about a burning tissue at the bottom of a long escalator at the King’s Cross subway station. He ran down and put it out, but he didn’t ask what happened or tell anyone about the incident. Although more passengers reported smoke, the station staff delayed calling the fire brigade. Meanwhile, passengers kept arriving at the station.
The London Underground fire demonstrates how poor habits prevent organizations from fulfilling their goals. Because of the Underground’s organizational structure, its workers learned to hide problems and avoid responsibility. As a result of this disorganization, it failed to stop an obvious, ongoing crisis.
More than a half hour after the burning tissue, a fireman finally got to the station. The whole escalator was already on fire. To avoid tardiness, trains refused to let disembarking passengers back in, even though they could tell that the station was on fire. Then, the whole escalator exploded. Because the fire brigade couldn’t coordinate with the Underground management, the fire took six hours to put out. More than 30 people died.
Like the station staff, the train operators made the crisis worse due to their improper habits and incentives. Their jobs were organized around timeliness, not saving lives, and they weren’t interested in changing this when the fire broke out. Similarly, the fire brigade and Underground management also failed to cooperate because they viewed their jobs as separate. All of this was rooted in institutional cultures—which determined how people approached and performed their jobs.
The Underground’s informal rules were responsible for this catastrophe. For instance, employees learned not to overstep their bounds, didn’t know how to use the sprinklers or fire extinguishers, and were encouraged not to call the fire brigade—who weren’t supposed to use other agencies’ hydrants. All of these informal rules made sense in isolation. But they also meant that, at the end of the day, nobody was responsible for passenger safety. This shows that truces can actually be dangerous. Paradoxically, organizations need to balance authority evenly and give some people ultimate authority over others. To do this, they have to do what Tony Dungy and Howard Schultz did: take advantage of a crisis.
Duhigg shows that informal rules can shape an organization’s culture and outcomes as much as formal ones. In this sense, all companies have cultures, norms, and habits—whether they recognize it or not. The Underground’s core problems were its lack of clear hierarchy and its emphasis on employees filling narrow job descriptions, rather than collaborating to solve problems. As a result, nobody was equipped to address a crisis—and nobody else wanted to step in. Instead, Duhigg suggests, effective organizations have both clear leadership structures and clear incentives for lower-level members to innovate and take on greater responsibility. (Alcoa under Paul O’Neill’s leadership is a good example of this structure.)
As the Rhode Island Hospital repeatedly botched surgeries, it gained national media attention. Doctors started fighting with reporters. Then the hospital’s chief quality officer declared that the media attention was an opportunity for the hospital to completely rework its culture. The hospital gave the entire staff a day-long training, redesigned surgical safety procedures, and created an anonymous reporting system for safety issues.
The Rhode Island Hospital’s dysfunctional organizational habits caused a full-fledged public relations crisis. But this crisis gave it an opportunity to improve, and fortunately, the hospital’s leadership took that opportunity. While crisis isn’t the best or only way for organizations to improve, Duhigg shows that it can be the most practical. To respond to crises, organizations often have to change anyway, and it is much easier to change institutional habits when an institution’s structure is already in flux.
Other hospitals, like Boston’s Beth Israel, have taken similar steps after major public mistakes. So have organizations like NASA and the international airline industry, which both overhauled safety standards after major accidents. After the 1987 London Underground fire, a special investigator started learning what happened. Everyone knew that the Underground needed to improve its fire safety, but nobody had taken responsibility for it, so the investigator took his inquiry public and published an extremely critical report about the Underground’s dysfunctional bureaucracy. The Underground immediately reformed itself by appointing safety managers and empowering employees to report problems.
Rhode Island Hospital, Beth Israel, NASA, and the London Underground all took accountability for their mistakes and changed their institutional habits in response to crises. This is very similar to how many individuals—like Lisa Allen and Bill Wilson—have transformed their lives in response to crises. The Underground investigator clearly saw that the Underground needed a proactive, collaborative culture in order to stop future crises.
Duhigg concludes that any organization can successfully reform its toxic habits during a crisis. Rhode Island Hospital hasn’t made any serious errors since 2009. Doctors now treat nurses with respect, and one young nurse even called the hospital “an amazing place to work.”
Organizations succeed when they get everyone to work harmoniously toward shared goals. Duhigg has shown why institutional culture is key to creating this harmony. Namely, organizations have to balance power throughout themselves, and they have to develop shared habits that encourage collaboration rather than conflict. Clearly, the Rhode Island Hospital succeeded in doing so.